The comments came after the Audit Commission warned the public sector would need to save £5bn from the wage bill to help the economy recover from the downturn. Its chief executive Steve Bundrer said public sector workers could “tolerate” a pay freeze.

Local government employers are still in talks about this year’s pay deal. Unions rejected a 0.5% offer earlier this year.

The report said: “Retention, which has previously been a major challenge for employers of graduates, has predictably been less of an issue this year as flighty Generation Y has its wings clipped by the recession.”

The survey also revealed the average starting salary had stalled at £25,000.

More than 40% of Londoners believe Tube workers should not be allowed to strike, a poll has revealed. The Metro-Harris poll showed last month’s strikes galvanised the opinion of the capital’s residents, with just 23% believing any worker had the right to down tools. Just one in 10 supported the Underground workers’ action over job cuts, while 41% said transport staff should be banned from striking.

The poll was carried out in the last week of June, asking more than 1,100 people how they felt about the Tube’s industrial action.

Ahead of the G8 summit on Wednesday, the prime minister is due to sound a warning in France today when he meets with president Sarkozy.

Brown will cite soaring oil prices, a 10% drop in trade and the failure of banks to start lending again as three major risks to the global economy. “If we do not take the necessary action now to strengthen the world economy and put in place the conditions for sustainable growth, we will be confronted with avoidable unemployment for years to come,” he is expected to say.

The business group warned unemployment would soar to 3.03 million by next summer unless the government took decisive action, including: a scheme to give redundant workers double the amount of Jobseekers Allowance for the first six months; and a review of the 90-day consultation period where 100 or more workers face job cuts, as it “prolongs uncertainty”.

Such a move could trigger more strikes, however. Members of the Communication and Workers Union in London are already set to strike on three days this week over modernisation plans, including job cuts.

More than 140 Labour backbenchers opposed the plans to part-privatise Royal Mail, although if the government had been able to attract £3bn for the stake it would have taken responsibility for the pension pot, which now has a defecit of £3.4bn.